This article will tell you what is terms of trade (also called Incoterms), and difference between DDP, DDU, DAT and DAP. Terms of trade information is required when filling in customs details of invoices for international shipments.
What is terms of trade?
Terms of trade, also called Incoterms or International Commercial Terms, details seller or buy bear the responsibility and cost for import clearance, duties, and delivery to final destination. Two common terms of trade options are:
|Import Customs Clearance||Import Duties and Taxes|
|DDP - Delivered Duty Paid||Seller||Seller|
|DDU- Delivered Duty Unpaid||Buyer||Buyer|
DDP - Delivered Duty Paid
DDP means Delivered Duty Paid, meaning seller bears complete expenses of transportation, customs clearance, and import duties and taxes to reach the goods at buyer's premise.
DDU - Delivered Duty Unpaid
DDU means Delivered Duty Unpaid, meaning that buyer has to bear the cost of import customs clearance, and import duties and taxes, while seller is responsible for all other charges.